California's Toxic Mold Legislation

By Gary A. Lucks*

Copyright 2001 © All Rights Reserved

This article was originally published in the CALIFORNIA ENVIRONMENTAL LAW REPORTER (Matthew Bender). Permission to reprint is hereby granted by the publisher.

I. Background of 2001 Legislation

Extensive media coverage highlighting the dangers of so-called "toxic molds" has fueled the fears of homeowners and renters and in turn has spawned a proliferation of lawsuits against architects, developers, builders, and landlords for personal injury and damages. Recent energy-efficient building designs create airtight structures that prevent the escape of condensation or other sources of water. The trapped water, in the presence of newer building materials such as drywall, enables molds to thrive in indoor environments. These conditions, combined with new generation ventilation systems, enhance the dispersal of mold throughout buildings.

Although not all molds are dangerous, some molds can cause allergic reactions that irritate the eyes, nose, throat, and skin, and aggravate respiratory diseases such as asthma. Public alarm regarding the health effects of mold, combined with disagreement in the scientific community over what constitutes safe levels of exposure to mold spores, led to the enactment of the Toxic Mold Protection Act of 2001 (the Act) [SB 732 (Ortiz), 2001 Stats., ch. 584] and companion legislation also enacted in 2001 [AB 284 (Jackson), 2001 Stats., ch. 550].

The Act designates the California Department of Health Services (DHS) as the lead agency and tasks the agency with the following [see Health & Safety Code § 26101(e)]:

  • The responsibility for adopting "permissible exposure limits" (PELs) for mold1 in indoor environments;
  • Developing standards for mold identification and remediation efforts; and
  • Developing guidelines for determining what constitutes mold infestation.

The Act further requires DHS to develop health threat assessment standards and disclosure requirements, and provides DHS with broad enforcement authority [see Health & Safety Code §§ 26105, 26154].

Before the Act's enactment, there were no state or federal statutes or regulations addressing indoor exposure to, identification of, or remediation of mold. Additionally, although real estate disclosure laws require sellers of real property to disclose material defects of real property, these disclosure laws did not specifically address the presence of mold as a potential threat to public health.

II. Standards and Guidelines

A. Development of Standards

The Act establishes a process for the development of the following standards and guidelines addressing mold:

  • PELs for mold in indoor environments [see Health & Safety Code § 26102];
  • Mold identification and remediation efforts [see Health & Safety Code § 26130];
  • Guidelines to assess the health threat posed by mold in indoor environments [see Health & Safety Code § 26105];
  • Guidelines for determining what constitutes mold infestation [see Health & Safety Code § 26120];
  • Guidelines for removing mold and its underlying cause [see Health & Safety Code § 26131]; and
  • Disclosure form addressing the presence of mold in real property and appurtenances [see Health & Safety Code § 26154].

Scientific and technical understanding of the health effects of mold, and practical methods for managing associated public health risks, are in their infancy. Likewise, the nascent standards addressing mold are designed to foster further study and to arrive at effective approaches to regulate mold in indoor environments. These forthcoming standards will not take effect for several years.

Once DHS initiates work to develop standards or guidelines, it is required to receive public input on its proposed standards or guidelines [Health & Safety Code §§ 26104(a), 26107(a), 26124(a)-(c), 26132(a)-(c)]. DHS must also report its progress to the Legislature in developing its standards and guidelines by July 1, 2003 [Health & Safety Code §§ 26103(d), 26105(d), 26122(e)].

B. Review of Standards

At least once every five years after adoption of each standard or guideline, DHS must review the standard or guideline and amend it whenever there are (1) changes in technology or treatment techniques that permit a materially greater protection of public health; or (2) new scientific evidence that indicates molds may present a materially different risk to public health than was previously determined [Health & Safety Code §§ 26104(d), 26107(c), 26125, 26134(b)].

C. Task Force

DHS is required to convene a multidisciplinary task force to advise it on the development of the standards set forth in [A], above. The task force is to be comprised of all of the following [Health & Safety Code § 26101.7]:

  • Volunteer representatives of public health officers;
  • Environmental health officers;
  • Code enforcement officers;
  • Experts on the health effects of molds, medical experts, certified industrial hygienists, and mold abatement experts;
  • Representative of government-sponsored enterprises;
  • Representatives from school districts or county offices of education;
  • Representatives of employees and representatives of employers;
  • Affected consumers, which include, but are not limited to, residential, commercial, and industrial tenants, homeowners, environmental groups, and attorneys; and
  • Affected industries, which include, but are not limited to, residential, commercial and industrial building proprietors, managers or landlords, builders, realtors, suppliers of building materials and suppliers of furnishings, and insurers.

III. Role of California Research Bureau

Recognizing that there is considerable debate about practical options to prevent and control mold in indoor environments, the California Research Bureau,2 in consultation with DHS, must publish a study addressing fungal contamination in indoor environments by January 1, 2003 [Health & Safety Code §§ 26200(a), 26203(a)]. In addition, the California Research Bureau is required to convene a review panel to assist in establishing the scope of the study [Health & Safety Code § 26200(b)]. The review panel must be composed of a diverse group of professionals including, among others, representatives of health officers, environmental health directors, experts on the health effects of fungi, medical experts, mold testing experts, industrial hygienists, and engineers [see Health & Safety Code § 26200(c)]. The review panel is required to examine the following areas relating to fungal contamination in indoor environments [see Health & Safety Code § 26201]:

  • Medical and public health;
  • Evaluation and monitoring;
  • Remediation and prevention;
  • Educational materials; and
  • Hazard communication.

IV. Permissible Exposure Limits

To avoid adverse effects on general public health, DHS is required to consider the feasibility of developing "Permissible Exposure Limits" (PELs) for mold in indoor environments [Health & Safety Code § 26102]. DHS may develop alternative PELs for subgroup populations that may be at greater risk of adverse health effects and that are served by hospitals, childcare facilities, and nursing homes. These subgroups may include infants, children age six years and under, pregnant women, the elderly, asthmatics, allergic individuals, or immune compromised individuals [Health & Safety Code § 26103(c)].

The likelihood that DHS will develop PELs in a timely manner is in question in light of the fact that the Act did not authorize funding to support the research called for by the Act, and that these provisions are only to be implemented to the extent that DHS determines that funds are available [see Health & Safety Code § 26156]. In the event that DHS determines that adopting PELs is feasible, DHS must, in consultation with the task force [see [II][C], above], adopt PELs that target the general population and that avoid adverse effects on health, with an adequate margin of safety. This objective must balance technological and economic feasibility against protecting public health. For purposes of determining economic feasibility, DHS must consider the costs of compliance to tenants, landlords, homeowners, and other affected parties [Health & Safety Code § 26103].

V. Health Threat Assessment Standards

In consultation with the task force, DHS must adopt practical standards to assess the health threat posed by the presence of mold in the indoor environment. These standards must, among other things, protect the public's health, target the general population, and balance the protection of public health with technological and economic feasibility. However, the Act does not require blanket air and surface testing to determine whether the presence of mold constitutes a health threat [Health & Safety Code § 26105(a), (b)]. DHS must report its progress to the Legislature in developing the assessment standards for molds by July 1, 2003 [Health & Safety Code § 26105(d)]. DHS may develop alternative assessment standards for subgroup populations that may be at greater risk of adverse health effects and that are served by hospitals, childcare facilities, and nursing homes. These subgroups may include infants, children age six years and under, pregnant women, the elderly, asthmatics, allergic individuals, or immune compromised individuals [Health & Safety Code § 26106].

VI. Guidelines for Identification of Molds

In consultation with the task force [see [II][C], above], DHS must develop and adopt guidelines to recognize mold, water damage, or microbial volatile organic compounds in indoor environments [Health & Safety Code § 26120]. These guidelines must include scientifically valid methods to identify the presence of mold and must include elements addressing the collection of air, surface and bulk samples, as well as visual and olfactory identification, laboratory analysis, measurements of moisture, and other recognized analytical methods used to identify molds [Health & Safety Code § 26121]. However, the Act does not grant DHS the authority to require a landlord to conduct testing of units or buildings to determine whether the presence of mold exceeds the PEL [Health & Safety Code § 26122(c)]. In addition, DHS must develop a reporting form to document the presence of mold [Health & Safety Code § 26122(d)].

VII. Remediation of Toxic Molds

DHS, in consultation with the task force [see [II][C], above], must develop and disseminate remediation guidelines for molds in indoor environments [Health & Safety Code § 26130]. The guidelines must provide practical guidance for removing mold and the underlying cause of mold (i.e., the associated water intrusion and water damage in indoor environments), while balancing protection of public health with technological and economic feasibility. Additionally, the guidance must provide practical advice for removing or cleaning contaminated materials in a manner that protects the health of those performing the abatement. The guidance must also include criteria for personal protective equipment. However, a landlord, owner, seller, or transferor need not be specially trained or certified, nor must he or she utilize the services of a specially qualified professional to conduct the mold remediation [Health & Safety Code § 26131(a)(1)-(7)].

DHS must make information about contracting for the removal of mold available to the public [Health & Safety Code § 26134(a)]. In addition, DHS must develop multilingual public education materials, which address the health effects of molds and present methods to prevent, identify, and remediate mold growth. These materials must also include information that identifies additional resources and contact information to obtain additional assistance concerning mold [Health & Safety Code § 26134(c)].

VIII. Disclosures

A. General Requirement of Notice; Written Disclosures by Landlords and Sellers

Landlords and sellers of residential, commercial, and industrial real property must meet specific requirements concerning disclosure of the presence of mold [see Health & Safety Code §§ 26140, 26143, 26147]. Disclosures are not required until the January 1 or July 1 that occurs at least six months after DHS establishes standards and guidelines for the following [Health & Safety Code §§ 26141(e), 26146(d), 26147(e)]:

  • Permissible Exposure Limits (PELs) [see Health & Safety Code § 26103; see also IV, above].
  • Assessing health threats posed by mold spores [see Health & Safety Code § 26105; see also V, above].
  • Remediating mold infestations [see Health & Safety Code § 26130; see also VII, above].

Landlords of commercial or industrial real property (including public entities that own, lease, or operate a building) must then issue written disclosures to prospective and current tenants when (1) the landlord knows of the presence of mold affecting the premises,3 and (2) the mold spores either exceed the PEL or pose a health threat pursuant to DHS guidelines [see Health & Safety Code § 26105]. The disclosure must be made as soon as practicable and before entering into the rental agreement. Residential landlords must issue the written disclosure to prospective and current tenants when the landlord knows, or has reasonable cause to believe, that mold is present that affects the building and the mold spores either exceed the PEL [see Health & Safety Code § 26103] or pose a health threat [Health & Safety Code § 26147(a); see Health & Safety Code § 26105]. For residential landlords, the disclosure must be issued before entering into the rental agreement. For current tenants, the disclosure must be issued as soon as reasonably practical [Health & Safety Code § 26147(c)].

Sellers or transferors of commercial or industrial real property must issue written disclosures to prospective buyers when (1) the seller or transferor knows of the presence of mold affecting the premises,4 and (2) the mold either exceeds the PEL [see Health & Safety Code § 26103] or poses a health threat according to DHS guidelines [see Health & Safety Code § 26105]. The disclosure must be made as soon as practicable before the transfer of title [Health & Safety Code § 26140(a)]; however, it is not required until the January 1 or July 1 that occurs at least six months after DHS establishes [Health & Safety Code § 26140(d)]:

  • PELs [see Health & Safety Code § 26103; see also IV, above];
  • Standards to assess the health threat posed by mold exposure [see Health & Safety Code § 26105; see also V, above]; and
  • Guidelines for remediation of mold [see Health & Safety Code § 26130; see also VII, above].
B. Assessment of Mold

Commercial and industrial landlords who know or have notice that mold is present in the property, heating system, ventilating or air conditioning system, or appurtenant structures, or that there is a condition of chronic water intrusion or flood, have an affirmative duty, within a reasonable period of time, to assess the presence of mold or the condition likely to result in the presence of mold and conduct any necessary remedial action [see Health & Safety Code § 26143].5 Tenants of commercial or industrial real property are required, within a reasonable period of time to notify the landlord when mold is present or if there is a condition of chronic water intrusion or flood.6 Additionally, in situations where the landlord is responsible for maintenance of the property, tenants must make the property available to the landlord or his or her agents to allow an assessment or remedial action as soon as reasonably practicable [see Health & Safety Code § 26142].7

C. Exceptions to Disclosure Requirements

Disclosures are not required if the mold in question was remediated according to the guidelines discussed in VII, above [Health & Safety Code §§ 26130, 26140(b), 26141(c), 26146(c), 26147(d)].

Further, neither commercial, industrial, or residential landlords nor sellers or transferors of real property are required to conduct air or surface tests to determine whether the presence of mold exceeds the PELs established pursuant to Health & Safety Code § 26103 [Health & Safety Code §§ 26140(c), 26141(d), 26147(b)]. Additionally, the disclosure requirements do not apply to properties where the tenant is contractually responsible for maintaining the property, including any remedial action [Health & Safety Code § 26144]. Such tenants who know or are informed of the presence of mold must inform the landlord in writing of that knowledge as soon as it is practicable [Health & Safety Code § 26145], and must correct the condition pursuant to the terms of the lease [Health & Safety Code § 26145].8

D. Issuance of Consumer Information to Prospective Residential Tenants

Before entering into the rental or lease agreement, residential landlords must issue a DHS consumer-oriented booklet to prospective tenants addressing the potential health risks and the health impact that may result from exposure to mold [Health & Safety Code § 26148(a), (b)]. This disclosure is not required until the January 1 or July 1 that occurs at least six months after DHS approves the consumer-oriented booklet [Health & Safety Code § 26148(c)].

IX. No Relief From Other Duties

Notwithstanding the disclosure provisions discussed in VIII, above, Act does not provide relief from other statutory or common law duties governing inspections, notifications, and other duties pertaining to the sale or leasing of real property, including among other obligations [Health & Safety Code §§ 26149, 26150, 26151]:

  • A landlord's obligations to make leased premises fit for occupation [see Civ. Code §§ 1941, 1941.1];
  • Disclosure obligations for property transfers [see Civ. Code §§ 1102.6, 1102.6a]; and
  • A real estate agent's obligation to disclose material defects [see Civ. Code § 2079].

X. Enforcement

Government officials, including public health officers, code enforcement officers, environmental health officers, city attorneys, and other appropriate government entities, have authority to respond to complaints about mold and to enforce all of the following [Health & Safety Code § 26154]:

  • The PELs [see Health & Safety Code § 26103; see also IV, above];
  • The standards designed to assess health threats posed by mold [see Health & Safety Code § 26105; see also V, above]; and
  • The disclosure requirements [see Health & Safety Code §§ 26147, 26148, 26152; see also VIII, above].

Local authorities become empowered to enforce the residential disclosure provisions no sooner than the first January 1 or July 1 that occurs at least six months after DHS adopts disclosure enforcement guidelines [Health & Safety Code § 26154]. Penalties can be imposed against owners for failure to disclose unless the owner provides a disclosure that substantially conforms to a disclosure form to be established by DHS [Health & Safety Code § 26154].

XI. Mold Testing Professional Standards

The Department of Consumer Affairs, in conjunction with DHS and the Department of Industrial Relations and the task force [see Health & Safety Code § 26101.7] must evaluate the need for standards to govern mold testing and mold remediation specialists [see Health & Safety Code § 26155].

XII. Mold and Common Law

A number of lawsuits using traditional legal theories have been lodged against landlords, architects, developers, contractors, property owners, and their insurers. The following conventional legal theories have been used to seek redress for property damage, bodily injury, and emotional distress:

  • Negligent property ownership and management when the landlord fails to warn or respond appropriately to water intrusion involving personal injury [see Mazza v. Schurtz et al. (Sacramento Superior Court No. 00AS04795, November 7, 2001)].
  • Product liability from mass-produced housing developments involving construction defects for failure to construct a water-tight home or building (e.g., leaking windows).
  • Negligent design or installation of drainage systems that causes water to accumulate and promote mold growth.
  • Bad faith claims against insurers who fail to correct or adequately address faulty plumbing.
  • Misrepresentation by realtors who misstate the condition of the premises.
  • Breach of warranty claims against contractors and developers for faulty workmanship or use of inappropriate materials.

In addition to seeking compensation for bodily injury and property damage, plaintiffs have been successful in arguing that mold contamination has resulted in loss of personal property beyond the area exposed to water damage.9

For coverage of toxic torts, including discussion of the theories of liability, defenses, and damages, see Manaster & Selmi, California Environmental Law & Land Use Practice

, Ch. 3, Toxic Torts and Environmental Litigation.

Currently, there are no legally binding standards describing safe exposures to mold. In the absence of a safe harbor, plaintiffs' lawsuits have continued to proliferate. With the development of PELs, the bar to bringing an action for property damage or personal injury will likely rise eliminating those cases where alleged mold exposures fall within permissible levels.

Endnotes

1 "Mold" means any form of multicellular fungi that live on plant or animal matter and in indoor environments. Types of mold include, but are not limited to, Cladosporium, Penicillium, Alternaria, Aspergillus, Fuarim, Trichoderma, Memnoniella, Mucor, and Stachybotrys chartarum, often found in water-damaged building materials. See Health & Safety Code § 26101(e), (g).

2 The California Research Bureau is part of the California State Library.

3 This applies whether the mold is visible, invisible, or hidden.

4 This applies whether the mold is visible, invisible, or hidden.

5 This obligation became effective on January 1, 2002. The duty appears to be premised on having the ability to use the forthcoming mold identification guidelines (pursuant to Health & Safety Code §§ 26120 and 26122(e)). However, there is no deadline by which DHS must establish these guidelines other than to report its progress to the Legislature by July 1, 2003.

6 In the absence of mold identification guidelines, it is advisable to direct maintenance staff to evaluate the presence of water or mold growth and to determine whether the condition is due to poor housekeeping compared to other causes such as condensation. In the event of the latter, it would be prudent to hire a qualified professional such as a certified industrial hygienist who is affiliated with the American Conference of Governmental Industrial Hygienists to confirm the presence of mold and/or conditions that support mold growth.

7 This obligation became effective on January 1, 2002. The duty precedes the obligation by DHS to develop threat assessment and remediation standards (pursuant to Health & Safety Code §§ 26105 and 26130(e)). There is no deadline by which DHS must establish these guidelines other than to report its progress to the Legislature by July 1, 2003.

8 The statute refers to the terms of the "contract." However, it appears that the statute is intended to refer to the terms of the "lease."

9 A recent jury verdict was awarded against an apartment owner, the property managers, and general partners for $2.7 million for injuries caused by mold exposure. Darren Mazza, et al. V. Raymond Schurtz, et al., No. 00AS04795, California Superior Court, Sacramento, California.